Value of Used AT Trailers

[Nay]

I am looking into trailer financing with my local credit union and getting pretty good terms, including on used trailers (they are not differentiating vs. buying new).

Does anybody know of a reference point for how an AT trailer (or similar) would hold value?

I know the AT's hold great value here, and used ones are hard to find despite two really nice ones currently in classifieds, but am wondering how value would be calculated for a bank as they are only willing to give a 90% LTV (loan to value) loan.

This makes one interested in finding a 90% or less LTV deal as that means you still get 100% financing.

Appreciate any perspectives...

 

[Martyn]

From what I have seen they hold at least 85% of their value. It doesn't seem to matter how old they are or what condition they are in.

 

[Nay]

Don't disagree for what I've seen...wonder if the bank would agree...suppose the rest of the conversation belongs back channel if there is no NADA type mechanism the bank would be able to use...

 

[Swingshiftworker]

If you're going to try to get financing, the best thing to do would be to buy a NEW trailer. You'll pay more than for a used one, but it'll be new and you won't have to argue w/the lender about what the used trailer is really worth.

Frankly, since there's no "book value" for an AT or any other off-road trailer,the underwriter would be unlikely to agree to value the trailer at 85% of new regardless of age (even though we know that many AT trailers go for that price). Most likely, the lender will use a conservative RV or road trailer depreciation model, which would result in about 33-50% depreciation over 3-5 years, which means you won't get much of a loan and will have to put up a substantial down payment.

For example, if they value a 5 year old trailer at 50% of new and the original purchase price was $15,000 and the sale price is $12,750 (85% of new), they'd value the trailer (FOR LOAN PURPOSES) at $7500 and, if they're willing to finance 80% of that, would only give you a $6000 loan and you'd have to come up the other $6,750. Not a very good deal.

However, if you buy a NEW fully equipped Horizon trailer from AT for about $18,000, you could get an 80% loan of $14,400 for it and would only have to put up another $3,600 for a down payment. That's a much better deal for you and, assuming the trailer holds 85% of the purchase price, you should be able to sell for more than the outstanding balance of the loan within 3-5 years of the purchase. That's a much better deal for you.

Think about it. Good luck!

 

[hidden]

hmmm, lets see here. I can buy a used something for $10 but have to pay for $5 of it with quarters, or I can buy new something for $15 and the associated cost in quarters is $3 so that must be a better deal for me right, since I only have to pay with $3 of quarters? Great logic lets just ignore the other $12 remaining as compared to $5. Lets not forget that everyones pockets are not the same depth and so total price of a used trailer may be all one can afford.....don't forget the bottom line.

If you're going to try to get financing, the best thing to do would be to buy a NEW trailer. You'll pay more than for a used one, but it'll be new and you won't have to argue w/the lender about what the used trailer is really worth.

For example, if they value a 5 year old trailer at 50% of new and the original purchase price was $15,000 and the sale price is $12,750 (85% of new), they'd value the trailer (FOR LOAN PURPOSES) at $7500 and, if they're willing to finance 80% of that, would only give you a $6000 loan and you'd have to come up the other $6,750. Not a very good deal.

However, if you buy a NEW fully equipped Horizon trailer from AT for about $18,000, you could get an 80% loan of $14,400 for it and would only have to put up another $3,600 for a down payment. That's a much better deal for you and, assuming the trailer holds 85% of the purchase price, you should be able to sell for more than the outstanding balance of the loan within 3-5 years of the purchase. That's a much better deal for you.

 

[Swingshiftworker]

hmmm, lets see here. I can buy a used something for $10 but have to pay for $5 of it with quarters, or I can buy new something for $15 and the associated cost in quarters is $3 so that must be a better deal for me right, since I only have to pay with $3 of quarters? Great logic lets just ignore the other $12 remaining as compared to $5. Lets not forget that everyones pockets are not the same depth and so total price of a used trailer may be all one can afford.....don't forget the bottom line.

Not sure what your quarter analogy is all about, but I think you missed the point of my comment.

If you're buying the trailer CASH and you can't afford more, then it, of course, makes sense to buy the USED trailer for less. But, if you need to borrow money to buy the trailer and if you're still paying 85% of the original purchase price for a USED trailer, you're really NOT saving all that much money by buying it USED instead of NEW.

Also, if you can't establish the value of a USED trailer and the lender low-balls you on the loan value, you'll have to spend MORE money on the down payment for a USED trailer than a NEW one -- money that you probably won't have if you need to finance the purchase in the first place.

Lastly, if an AT trailer really retains 85% of it's value regardless of age, you should be able to sell the trailer w/in a few years for more than the outstanding balance of the loan on a NEW trailer, which should give you the ability to get out of the loan if you need to sell the trailer prematurely.

So, I think that financing a NEW AT trailer makes more sense than financing a USED one, regardless of how you count your quarters. Ciao!

 

[Nay]

Not sure what your quarter analogy is all about, but I think you missed the point of my comment.

If you're buying the trailer CASH and you can't afford more, then it, of course, makes sense to buy the USED trailer for less. But, if you need to borrow money to buy the trailer and if you're still paying 85% of the original purchase price for a USED trailer, you're really NOT saving all that much money by buying it USED instead of NEW.

Also, if you can't establish the value of a USED trailer and the lender low-balls you on the loan value, you'll have to spend MORE money on the down payment for a USED trailer than a NEW one -- money that you probably won't have if you need to finance the purchase in the first place.

In my example, which was purely hypothetical (but not unrealistic), you'd have to pay almost twice as much for the down payment on a USED trailer because of the low loan valuation. The monthly payments for the USED trailer would be less (but probably not that much less) because of the lower loan amount, but you'd have to put MORE money into the down payment, which you may not have in the first place if you have to finance the trailer.

Lastly, if an AT trailer really retains 85% of it's value regardless of age, you should be able to sell the trailer w/in a few years for more than the outstanding balance of the loan on a NEW trailer, which should give you the ability to get out of the loan if you need to sell the trailer prematurely.

Make sense to me, regardless of how you count your quarters. Ciao!

Yes, this is generally what I am thinking and why I asked.

Frankly, the value of buying used if possible would be to find something local to avoid the shipping side and actually get a decent reduction on the cost over new, although AT isn't across the entire county from me and it would be a hugely fun road trip with the family.

In straight terms, paying 85% for something used is generally a terrible deal over buying new because while the trailer itself may have a very long useful life (look at all of the M101s, etc.), other items such as a batteries do not, and even the RTT, fridge, etc. don't have the useful life of the trailer. If the new trailer has a decent warranty, that makes going new all the more attractive.

I'm pretty sure an underwriter will use a factor related to the general recreational vehicle class, travel trailers being as specific as they could get if that would even be a sub class.

Thanks for the inputs

 

[Martyn]

hmmm, lets see here. I can buy a used something for $10 but have to pay for $5 of it with quarters, or I can buy new something for $15 and the associated cost in quarters is $3 so that must be a better deal for me right, since I only have to pay with $3 of quarters? Great logic lets just ignore the other $12 remaining as compared to $5. Lets not forget that everyones pockets are not the same depth and so total price of a used trailer may be all one can afford.....don't forget the bottom line.

I think we forgot to welcome you to the Portal.

 

[Romer]

Dave, your welcome to check out my Horizon. I think Paul May is also bringing his Chaser to Moab. Mine has most of the toys except it has the older suspension. The newer suspension is worth somthing in itself.

I pulled the Engel out of the 80 and put it in the trailer and bought a new ARB frige for the 80. Rationale, I will go out a lot more with just the 80 for day trips

 

[Nay]

Thanks, Ken. I may take you up on that.

 

[jamm]

hmmm, lets see here. I can buy a used something for $10 but have to pay for $5 of it with quarters, or I can buy new something for $15 and the associated cost in quarters is $3 so that must be a better deal for me right, since I only have to pay with $3 of quarters? Great logic lets just ignore the other $12 remaining as compared to $5. Lets not forget that everyones pockets are not the same depth and so total price of a used trailer may be all one can afford.....don't forget the bottom line.

Sounds like the housing market to me. Didn't that fail? I agree with you, buy what you can afford.

 

[ert01]

X10.
I would not go into debt over something as menial as a trailer unless it was somehow:
A) a source of income for me
B) a necessity (ie a very long expedition trip for work or something)

 

[Atoyot1031]

Thanks, Ken. I may take you up on that.

Nay, I'll also have my popup at CM. You should check it out for the family. Besides, it's a fraction of the cost of an AT. You gonna be there?

 

[Arya Ebrahimi]

Nay stop following me from forum to forum! :bike_rider:

 

[MotoDave]

(nevermind)